Common Planning Scenarios
Problem #1: No Retirement Income Strategy
Often, clients may have assets in place, but they aren't sure how to turn them into a lifetime income stream for themselves and their families.
Possible Solution
One option is to separate assets into short-, intermediate-, and long-term "buckets." This approach is designed to help clients have money to spend now while allowing the rest of the assets to potentially grow over time. We can also help clients coordinate this with Social Security and Medicare in the hopes of minimizing taxes.
Our approach seeks to help minimize risk in down markets. As a result, clients may feel more confident that the income they need in retirement will be there and will have potential protection from market risk.
The Moral
Accumulation of assets is just one piece of the retirement planning puzzle. The other tricky piece is determining how to take retirement income, coordinate Social Security and Medicare, and minimize taxes. Therefore, we believe, it's essential to have a plan for making money in retirement to draw income without depleting the principal.
Problem #2: Unplanned Care Expenses Eating Away at Retirement Assets
Many clients worry that their estates will be consumed by future healthcare expenses not covered by Medicare and drain assets needed for daily living expenses.
Possible Solution
At the beginning of the retirement planning process, we aim to uncover this fear, which helps us use a portion of retirement income to help protect your assets. This is done by looking at the different investment options available.
The Moral
Long-term care and life insurance can play essential roles in a retirement plan, and their costs should be incorporated into retirement savings.
Problem #3: Paying Too Much in Retirement Plan Expenses
Many of our clients are already saving for retirement but seek opportunities to increase the potential growth of their retirement account without taking on more risk.
Possible Solution
We analyze the ins and outs of their current plan provider's cost structure to determine what they are paying in fees. Sometimes, an individual may be paying more in expenses than they realized. If this is the case, we may move clients to a plan provider with lower costs and then redirect the funds they are saving back to their retirement.
The Moral
It's essential to look at the costs of your investments and know who is getting paid.
Problem #4: An Outdated Estate Plan
Unfortunately, some clients are faced with the sudden loss of a spouse. Therefore, it is crucial to review beneficiaries periodically or after life-changing events (birth of child/grandchild, divorce, marriage, etc.). For example, if there is no beneficiary on an IRA, the spouse would have to take distributions for the entire account balance over five years and pay taxes on the distributions. This could potentially add up to a substantial amount.
Possible Solution
By visiting with our clients regularly, we seek to stay current with their life-changing events and update their plans accordingly.
The Moral
Periodically, beneficiaries need to be verified and updated. This simple step can help ensure your loved ones are provided for according to your wishes.